Wednesday, 23 June 2010

Newcastle rates system to stay

From The Herald...

NEWCASTLE will retain the status quo when it comes to levying rates, despite concerns about favouring the rich and burdening the poor.

The scheme will calculate residential property levies in 2010-11 using a 50 per cent base rate, with the remainder dependent on land value.

This system was introduced in 2009-10 and councillors voted 7-4 last night to retain it.

It means the average rates bill in Newcastle for the coming financial year will be $918.40, for those properties with the city's average land value of $208,598.

Newcastle City Council is applying a 2.6 per cent rates increase, in line with the state government cap.

Councillors attempted unsuccessfully last night to alter the civic system, to address what some viewed as an imbalance between rich and poor.

Cr Michael Osborne suggested basing rates entirely on land value, with a $603 minimum rate.

"Sixty-four per cent of households will be better off with an ad valorem minimum," he said.

His colleagues did not support the idea.

Cr Mike Jackson called for a scheme with 75 per cent of rates calculated on land value and a 25 per cent base amount.

"What we're neglecting councillors is marginal working families," he said of the 50-50 rates structure.

"They have mortgage stress . . . water's going up, power's going up . . . but we can't cut them a break with rates.

"Lower value properties will be paying more rates.

"They're the people who can least afford to be paying more."

Cr Brad Luke, who supported the 50-50 scheme, said other options would tax people whose land value might have gone up because they lived in a popular area.

"Simply putting such a large burden on those people I think is completely unfair," he said.

Under the 50-50 system, land valued at $1,000,000 will be levied $2660.58 in rates and a $100,000 property $679.34. With a 75-25 scheme, the $1,000,000 property would pay $3531.66 and the $100,000 lot $559.81.

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